Correlation Between Ares Management and Btg Pactual
Can any of the company-specific risk be diversified away by investing in both Ares Management and Btg Pactual at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ares Management and Btg Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and Btg Pactual Real, you can compare the effects of market volatilities on Ares Management and Btg Pactual and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ares Management with a short position of Btg Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Btg Pactual.
Diversification Opportunities for Ares Management and Btg Pactual
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and Btg is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and Btg Pactual Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Btg Pactual Real and Ares Management is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ares Management are associated (or correlated) with Btg Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Btg Pactual Real has no effect on the direction of Ares Management i.e., Ares Management and Btg Pactual go up and down completely randomly.
Pair Corralation between Ares Management and Btg Pactual
Assuming the 90 days trading horizon Ares Management is expected to generate 1.75 times more return on investment than Btg Pactual. However, Ares Management is 1.75 times more volatile than Btg Pactual Real. It trades about 0.12 of its potential returns per unit of risk. Btg Pactual Real is currently generating about -0.81 per unit of risk. If you would invest 3,984 in Ares Management on October 14, 2024 and sell it today you would earn a total of 6,908 from holding Ares Management or generate 173.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 3.46% |
| Values | Daily Returns |
Ares Management vs. Btg Pactual Real
Performance |
| Timeline |
| Ares Management |
| Btg Pactual Real |
Ares Management and Btg Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Btg Pactual
The main advantage of trading using opposite Ares Management and Btg Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Btg Pactual can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Btg Pactual will offset losses from the drop in Btg Pactual's long position.| Ares Management vs. Taiwan Semiconductor Manufacturing | Ares Management vs. Apple Inc | Ares Management vs. Alibaba Group Holding | Ares Management vs. Banco Santander Chile |
| Btg Pactual vs. Energisa SA | Btg Pactual vs. BTG Pactual Logstica | Btg Pactual vs. Plano Plano Desenvolvimento | Btg Pactual vs. Ares Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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